FTSE MIB price hits 4-week high as Italy carefully reopens for business
- FTSE MIB hits a 4-week high today as the buyers target 18,000 next
- Italy has allowed restaurants, cafes, museums and shops to reopen this week
- Strict hygiene and physical distancing measures remain in place
FTSE MIB is on the way to record the third consecutive day with gains as Italy’s benchmark index recovers after printing a 7-year low in March. Italy has reopened its restaurants, shops and cafes this week as serious concerns over the state of the economy still persist.
Fundamental analysis: Reopening starts
The Italian government has allowed restaurants, cafes, museums and shops to reopen this week after almost three months in lockdown. However, the new rules seem too strict for the owners, who are struggling to operate their businesses in the new environment.
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“One step at a time, with caution and attention, so as to avoid falling and going back. Italy will start running again,” the PM Giuseppe Conte wrote in a letter to the nation.
Although museums, shops, restaurants and cafes are now allowed to open for business, strict hygiene and physical distancing measures remain in place which makes life for business owners difficult.
“Were I to open tomorrow, I wouldn’t have one client. There are 12 luxury hotels on the street. Sixty percent of my business comes from their clientele and they’re all closed,” said Pietro Lepore, owner of Harry’s Bar on Rome’s tony Via Veneto, who was forced to furlough all 24 employees.
Although the worst is behind Italy, its citizens are still preparing to face the economic consequences of the COVID-19 outbreaks and national lockdown. Italy is still closed for travel, which is devastating for a country where 10% of GDP is based on tourism.
The international travel is set to resume on June 3, with hopes that travelers will still choose to visit Italy this summer.
Technical analysis: FTSE MIB hits a 4-week high
After Italy’s benchmark index posted a 7-year low in March, April and May have been used to recover a portion of these losses. So far, around 35% have been successfully recovered as buyers feel more confident given that the reopening of the economy has started.
FTSE MIB hit a 4-week high today, closing in on the first significant resistance, near the 18000 mark. A break of this level is likely to open the road for a test of the key short-term resistance at 18,500, home of 38.2% Fibonacci retracement and the horizontal resistance.
Italy has opened its restaurants, cafes, museums and shops this week, although strict hygiene and physical distancing measures remain in place. FTSE MIB trades at a 4-week high with eyes set on 18,000.
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